Asks Petroleum Ministry to withhold approvals for their failure to submit records
Upset at the repeated failure of Reliance Industries Limited (RIL) to submit for audit records and information relating to the Krishna Godavari D6 block, the Comptroller and Auditor-General has asked the Petroleum Ministry to withhold all approvals to the Mukesh Ambani-owned company, except in emergency situations.
The government auditor has also asked the Ministry not to clear the plans of British Gas (BG) for exploration projects as it had also failed to submit information and records relating to the Panna-Mukta-Tapti gas-fields.
Sources in the government said that soon after Veerappa Moily took over as Petroleum Minister this month, following the “unceremonious” exit of Jaipal Reddy, the CAG wrote to the Ministry, pointing to the continuous failure of the two companies to submit the records it had sought.
“The CAG, in its communication, has pointed out that every effort was being made to thwart the audit by the constitutional body, and one after another obstacle was created in the conduct of a smooth audit till 2011-12. Both RIL and BG are shying away from providing information and have adopted an ‘indifferent’ attitude to the CAG, resulting in the audit coming to a standstill,” the sources said.
Furthermore, the sources said, the CAG wrote to the Ministry, asking that it immediately direct RIL to submit all records pertaining to the KG D6 block for audit up to 2012, as any increase in the capital expenditure would have an adverse impact on the government’s interest. “Till the time RIL and BG submit the relevant records for audit and cooperate with the CAG, their approvals should be held back except in emergency circumstances,” it said.
Earlier this month, the CAG strongly objected to the “restrictive conditions” laid down by RIL for an audit, which it said “impinge upon the basic mandate, rights and obligations of the CAG” to conduct an audit and report the results to Parliament.
In a letter to Petroleum Secretary G.C. Chaturvedi on October 26, two days before Mr. Reddy was shunted out, the CAG said the conditions were unacceptable, and the CAG’s (Duties, Powers and Conditions of Service) Act, 1971, gave it an unfettered right and would override all conditions sought to be imposed on the audit process.
In it, the government auditor listed the conditions laid down by RIL: audit be restricted to “accounting books and records;” audit of the years that were time-barred be subject to the consent of the operator; audit report be submitted to the Ministry and not Parliament; audit be subjected to confidentiality arrangements between parties to the production-sharing contract; and the CAG be bound not to use the information acquired during the audit for any other audit under the Act.
Keywords: Reliance gas row, CAG audit report, KG-D6 block, gas exploration, oil rigging, under-production charge, Petroleum Ministry
Is government of India a Shop (dukan) of Relience?
We are but witness to the country while trying to bolster its economy
has become increasingly dependent market manipulators whether it is
King Fisher or Reliance. So much dependent in fact it is the
manipulators of market that is dictating the politicians. It is an
illusion to imagine that free democracy is shaped by sovereign people.
Series of financials scandals is no more than symptom of deeper malaise
of politicians paying more attention to crony capitalists. The power of
the streets is no match to the invisible power of these unscrupulous
capitalists. We are witnessing an unequal struggle caused by the
destruction of fine balance between democracy and market forces. No
matter who rule the country, governing is impossible to without finding
a lasting cure to daunting malady of tail wagging the dog!
HATS OFF to CAG efforts to eradicate the deep rooted corruption with out fear or favour!!
For once in a long time, we have an organisation, which works for the
welfare of the common man - CAG. We don't see this quite often. I extend
my complete support to CAG. Shame of Reliance and its crony capitalistic
ways are ruining this country.
i think the CAG is doing good work than CBI or CVC .
what is this govt upto??? who is running the country? shame on the govt.
I am from AP and I frequently visit Kakinada. I know for sure RIL is fooling the nation and
making money with the gas deals. Instead of Indians someone else is enjoying the gas for
sure at our expense.
Well done CAG. There should be someone like you to keep check on in-efficiencies.
The KG basin issue is not related to national security so that RTI act should not be applied to all details of the project as it is a natural resource owned by nation ,not RIL.When ONGC have been operating in the area in early nineties,the nation had not heard of any possibility of natural gas in KG basin on a commercial scale.After the government had opened the oil sector, Reliance industries got this basin and within two years the area became an area full of natural gas in abundant level.Now when India is facing crisis in getting gas due to astronomical rise in prices in international market, again RIL says the gas flow has decreased and British Petroleum enters the scenario.They want to raise the price to international level.
It is not clear then why this resource can not be taken back from them, as anyway at international level we can get gas from many sources.
Who is the Reliance to dictate CAG the ways it should do its job? Isn't the company is answerable to people when it is dealing with natural resources?
The CAG is batting to safeguard Indians' national interest and should be
supported.
This was to be expected. The Oil Ministry's machine is not well-oiled.
It is clearlly muscle flexing and political mudslinging going on. The government and CAG at the loggerhead would undermine the status of India as a business friendly country. However, if such allegations are not cleared by government, it would be detrimental to development of many other businesses. As C. Rangrajan said, the production sharing contract is basis of possible malpractices. Profit sharing deals should be the norm for developing Indian assets. Many times business does not run purely on idealism and socialism dream.
CAG must be listened carefully by the Government. It seems
convincing that RIL and BG have committed something wrong and are
trying to avoid transparent audit process. Now all depends upon the
Government machinery how it responds to CAG's recommendations. The
bottom line is that accountability of private players while dealing
any matter related to natural resources must be established. People
of India demands transparency and it is the right time to set
examples.
Government's ill-treatment of the CAG is emboldening private companies to cock a snook at CAG. Government's conduct is shameful and is an unfortunate precedent to future governments. Can the Supreme Court afford to turn a blind eye to this unedifying spectacle?
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